Mastercard, HSBC Roll Out Digital Dollar Blockchain Project Amid Crypto Crash; Reinstates Support

This proof-of-concept platform is expected to develop improvement solutions for financial settlements using the blockchain technology.

Mastercard, HSBC Roll Out Digital Dollar Blockchain Project Amid Crypto Crash; Reinstates Support

Photo Credit: Pixabay/ Sergei Tokmakov

The trial is also expected to test the practicality of programmable digital money

Highlights
  • Testers will get digital tokens representing their deposits
  • The New York Innovation Center will also be part of this initiative
  • BNY Mellon, Citi, PNC Bank are among other participants in the test

Mastercard, HSBC and Wells Fargo, among others in a group of bank giants in the US, have launched a digital dollar blockchain project amid the ongoing slump in the shaken crypto market. The name of the initiative is ‘Regulated Liability Network (RLN)'. This proof-of-concept platform is expected to develop improvement solutions for financial settlements using the blockchain technology. The launch of RLN is essentially a trial that will run for twelve weeks and singularly operate in co-relation with the US dollar.

The New York Innovation Center (NYIC), which is part of the Federal Reserve Bank of New York, will also be part of this initiative in order to understand ways to stimulate digital money issued by the regulated institutions.

“The RLN design that operates exclusively in US dollars where commercial banks issue simulated digital money or ‘tokens' – representing the deposits of their own customers – and settle through simulated central bank reserves on a shared multi-entity distributed ledger,” said an official statement on the development.

The trial programme is also expected to test the practicality of a programmable digital money design that is potentially extensible to other digital assets within existing laws and regulations.

“The PoC will simulate tokens that are 100 percent fungible and redeemable with other forms of money. It will include dialogue with the broader US banking community, including community and regional banks. Following the conclusion of the PoC, the banking group will publicise the results,” the release added.

The US is among several other nations that are structuring the initial designs of CBDCs or Central Bank Digital Currencies.

A CBDC is a blockchain-based payments solution that is regulated and controlled by the central banks. At present, India, Jamaica, and China are among several nations that are working on their respective CBDCs.

This result of this trial is expected to become an important contribution to the literature on digital money.

Edward Snowden, the former employee of US' National Security Agency (NSA), has welcomed the decision on Twitter.

BNY Mellon, Citi, PNC Bank, Swift, TD Bank, Truist, and the US Bank are also expected to be part of the project.


Apple unveiled eight new products at its September 'Far Out' event. Which ones will float — and which will sink? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Radhika Parashar
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More
Digital Services Act: Web Giants to Submit User Data as EU Law Comes Into Effect
Featured video of the day
Is Flexibility a Good Enough Reason to Buy The Lenovo Yoga AIO 7?
Share on Facebook Tweet Snapchat Share Reddit Comment google-newsGoogle News

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2022. All rights reserved.